Hi,
The Domain Melbourne auction clearance rate was a strong 75% on the weekend with 721 auctions reported, 543 properties selling, 125 passed in and 53 were withdrawn. In comparison, the clearance rate for the same time last year was 60%.
This was a solid result considering the auction numbers were higher although results are still somewhat a mixed bag. Properties that have no compromises are selling very well but properties that are compromised in some way are somewhat price sensitive.
I attended three auctions on Saturday of which two passed-in and one sold $200,000 over reserve. The property that sold $200,000 over reserve was a two bedroom, one bathroom unit on its title with no shared driveway in a great location. This had two older couples really stretching to try and secure it.
The other two that passed in were both in A Grade locations (one in South East and the other Inner North), one whilst liveable, neat and tidy, needs a structural renovation and the other had rectifiable issues with the floors. That being said, both auctions still attracted multiple bidders but the interested buyers were price sensitive as they needed to factor in work, and vendors needed to lower their expectations to sell, which they all did. Both properties sold immediately after the auction.
My feeling is that the property market is still somewhat price sensitive unless a property is ticking all the boxes. That means, A grade location, quiet street, close to shops and transport, good floorplan, in very liveable or renovated condition. Affordability is coming into play and buyers generally just don’t have the capacity to push their budgets like they used to when interest rates were lower. It will take a few more interest rate cuts I believe to ease this pressure. In the meantime, property prices are likely to continue to steadily increase as buyer demand and confidence rises.
Have a great week.
Kim Easterbrook – Managing Director
